Research extends beyond lab

The key to successful new product development in a recession is not the science behind its creation, but cost-effective, insightful research online before launch. Matthew Valentine reports

For every successful FMCG launch, the landscape is littered with those that lasted just weeks before vanishing from supermarket shelves. Indeed, more than two-thirds of all new products fail, according to AC Nielsen data.

However, fear of failure does not seem to be slowing the rate of new product development (NPD). During 2008, 14.5% of products in the ice cream sector were new launches, up from 13.4% the year before. Some 17.6% of bottled water products came new to the market last year, with the same number popping up in the vegetarian food sector.

To increase the chances of a successful launch, some companies are using online tools to help them target better and reduce wasted effort on doomed ideas. The knowledge gained can then help tailor further launch activity, such as field marketing campaigns.

“Online research has become more important over the past couple of years,” says Active Market Research managing director Jonathan Smith.

He says online quantitative research now means that companies can be more effective than previously. “It is now far cheaper to obtain quick, accurate data covering 20 to 30 questions online, rather than from a call centre. As much as 90% of web-based research is estimated to be quantitative as a result.”

Food and drink retailer Waitrose is among those using quantitative online research to work out how best to target shoppers, although a source at the supermarket points out that it is just “one element” forming a “small part” of the whole consumer insight mix.

In NPD terms, FMCG brands can preview a number of proposed packaging designs or TV ads to consumers and gain feedback on preferred options. The early stages of developing a totally new concept often need to be backed with a large quantity of qualitative research, explains Smith.

Toluna, an online research and software specialist, offers brands the ability to set up custom online panels of consumers to discuss “first run” ideas. The company has worked for brands including Weetabix, Wrigley’s and Anheuser-Busch. As Toluna has its own panels in 30 countries, the online process can test new ideas in multiple markets simultaneously.

“They can brainstorm ideas internally and have the results in front of a panel within a few days,” says Toluna director Mark Simon. “Online panels cut the cost of the NPD cycle. You might have 50 ideas that they can whittle down to ten.”

Simon adds: “By involving people early on, they are enthusiastic about the company and its products before they are even available to buy.”

Justify expenditure 

Yet not everybody involved in the creation of FMCG brands favours the extensive use of research. Joint founder of agency Williams Murray Hamm, Richard Murray, warns that many brand developers simply use it to justify expenditure to senior management. “The new products that have found success recently have come from genuine passion and conviction, rather than those created to fill a perceived gap in the market,” he says.

While Murray may champion gut instinct for generating successful innovations, the future is also likely to see increased levels of qualitative research conducted on the internet.

By using online forums to replicate focus groups, brands can gain insights from target consumers who may not be as easy to reach offline, such people with medical conditions who are reluctant to engage in face-to-face discussions or those with similar mindsets living in disparate geographical areas.

Complex analysis 

Smith does note, however, that because qualitative programmes often require more complex analysis and set-up, moving these projects online means there is not necessarily the same cost benefit that could be found by moving quantitative research to the internet.

Once a new FMCG product has been researched and manufactured, it is the launch that must bring it to the attention of shoppers. In a crowded market, field marketing can help make or break a new product.

From ensuring a range is properly merchandised and displayed in-store to tempting shoppers to taste is often down to a field marketing specialist.

“Everything starts with the consumer,” says Mike Hughes, managing director of field marketing company CPM and chairman of the Field Marketing Council at the DMA. He says that just like with online research, targeting is key. “If you are running a sales team, you need to go to shops where you know the most relevant consumers will be.”

Hughes says his company’s clients are under pressure to maximise the effectiveness of every penny spent.

He cites a promotion last summer for GSK-owned Ribena 100 Per Cent Pure Juice range, which saw the brand link with traditional-style arkets to host “Harvestival” events, to promote its product alongside local fruit and vegetables. CPM’s sales team made a push to ensure local retailers had the Ribena products available to maximise impulse sales.

Major investment 

However, as long as shoppers don’t say what they mean, or mean what they say in research, new products will continue to face many pitfalls. If even one-third succeed, this is the consequence of significant levels of investment and insight from brands.

David Jenkins, business development director of in-store communication specialist Pierhouse, says that the success or failure of FMCG products often comes down to something unrelated to either research or launch.

He argues that lack of communication between all the parties involved in products’ sale, distribution and marketing is ultimately responsible for many failures. He says: “All the research in the world is no use if the retailers still don’t talk to the brands.”

CASE STUDY: CADBURY

– Wispa
The best sort of online research can sometimes leapfrog conventional methods altogether, according to Tony Bilsborough, head of external communications at Cadbury.

The brand reintroduced its Wispa bar in 2007 after an online campaign orchestrated by fans on social network Facebook convinced the company that there was a demand for its return. “The growth of social networking sites has been a real catalyst, a real assistance to us in understanding what the public wants,” says Bilsborough.

The confectionery brand was initially sceptical about the validity of letting the influence of social networking sites impact on business decisions. Bilsborough explains: “We were wary of trusting the sites as a model to support business decisions because it was untried. We weren’t sure it was a true demonstration of democracy or a small number of noisy people having a spot of fun.” The bar was relaunched but would remain on sale only if sales were sufficient. “20,000 people does constitute a considerable mass of opinion,” says Bilsborough. When it was brought back, the bar attracted enough buyers and has stayed on sale ever since.

– Twisted
Last Halloween, field marketing group RPM was tasked with promoting the Cadbury Twisted bar, a spin-off from the iconic Creme Egg range.

The field marketing effort used hit squads wearing horror masks, as they engaged in a mass sampling campaign. While the firm was keen to differentiate Twisted from its parent brand, RPM account director Chrissy Dransfield admits: “People had a prior knowledge we could tap into.” About 450,000 samples were dispersed, highlighted by a media partnership with free newspapers London Lite and Metro, thought to be the first time a brand used both freesheets at once. A third strand to the campaign involved tasting activity in Student Union bars.

“It’s rare to have a brand new chocolate bar, it’s more often a changing of format,” says Bilsborough. The idea to launch a Creme Egg spin-off came from the recognition that a year-round Creme Egg could theoretically be a bestseller.

That consumer knowledge came not from specialist research but from experience and sales data. “It was not done because we’d asked the public,” says Bilsborough. “Who buys it – and when – is the truest form of feedback, no matter what the consumer says.”

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